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Price stability, financial stability, and sovereign debt sustainability policy challenges from the new trilemma

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  • Duvvuri Subbarao

Abstract

Managing price stability, financial stability, and sovereign debt sustainability is a new trilemma that has emerged after the global crisis for central banks. In managing the new trilemma, central banks would face some policy relevant questions: Is there a return of fiscal dominance of monetary policy? Can the new trilemma erode the autonomy and accountability of central banks? How far can pursuit of the new trilemma militate against growth? What are the limits to unconventional policy measures? The article is an attempt to understand the dimension and complexity of the new trilemma with an analytical assessment of these questions.

Suggested Citation

  • Duvvuri Subbarao, 2012. "Price stability, financial stability, and sovereign debt sustainability policy challenges from the new trilemma," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 5(2), pages 246-259, April.
    • Handle: RePEc:taf:macfem:v:5:y:2012:i:2:p:246-259
    DOI: 10.1080/17520843.2012.686921
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    1. Bagehot, Walter, 1873. "Lombard Street: A Description of the Money Market," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number bagehot1873.
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    Cited by:

    1. Cristi Spulbar & Adriana Spinu & Mihai Nitoi, 2012. "Financial Stability And Price Stability: An Empirical Analysis In Euro Area," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 220-229, December.

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